Medi-Cal plan will borrow up to $5 million

A Medi-Cal plan trying to move out of the red financially received approval for a $5 million line of credit from the county Tuesday.

The Ventura County Board of Supervisors approved the credit arrangement with the Gold Coast Health Plan. Gold Coast will use the money to increase its tangible net equity and move closer to state standards. The equity calculation measures revenue as compared to expenses.

The plan’s equity dipped to about $5.7 million in the red in December but reached positive numbers in January and February.

The Medi-Cal plan was launched in July 2011 to deliver health care to about 100,000 low-income residents. Concerns about Gold Coast’s finances played a role in the state Department of Health Care Services’ decision to issue a corrective action plan for the system, mandating financial and operational changes.

The plan previously had a $2.2 million credit line with the county. Gold Coast CEO Mike Engelhard said the plan will use the infusion of $5 million to address state concerns and push Gold Coast’s finances into the black.

He blamed the plan’s financial struggles in part on its startup status and the lack of money in the bank when the plan started operations nearly two years ago.

Engelhard said Gold Coast’s financial status is slowly improving, predicting the plan will need another year to meet state standards for tangible net equity.

County supervisors also approved pursuing an intergovernmental transfer of funds designed to boost Gold Coast and the Ventura County Health Care Agency’s hospital system. In the transfer, the two entities would send $15.3 million to the state to secure additional federal matching funds for Medi-Cal.

If the state and federal agencies finalize the transfer, Gold Coast would gain about $500,000, and the county hospital system would regain its initial payment and about $10 million to use to augment payments made last year to hospital doctors caring for Medi-Cal patients.

“It helps us, and it helps Gold Coast as well,” said Dr. Robert Gonzalez, director of the Ventura County Health Care Agency. “$10 million is a big boost.”